Ian Isaac, Head of Lombard, examines the challenges facing business in a new era of manufacturing.
As part of our long-term commitment to supporting manufacturers, Lombard and our colleagues at NatWest recognise that having a thorough understanding of how UK manufacturers think, and how we can work together to create a globally competitive industry, is fundamental to offering the products and services manufacturers need to succeed.
At the EEF National Manufacturing Conference, we launched the NatWest Future Fit report, the findings of which are part of a year-long research project into the future of the manufacturing sector.
The findings of the report make it clear that there are some serious challenges to keeping up with the demands of the industry, and that if UK manufacturing is to remain competitive, we have a role as financial providers to provide the right support to help you keep up with new technology to succeed globally.
As my colleague, Richard Hill, head of manufacturing at NatWest said at the launch, “Banks must adapt in order to provide appropriate funding; real sector expertise, and use networks to bring customers together.”
To download the report, click here.
We have already started looking at how we can do this. For example Lombard developed its Capital Import Finance product in partnership with our colleagues at NatWest to make it easier to buy equipment from outside the UK.
While NatWest recently launched a bridging loan aimed at encouraging businesses to claim cash back as part of the Government’s R&D tax credit scheme.
However, we recognise that we need to do much more to challenge how we support you and provide innovative ways of working.
Coming back to the present, our bi-annual Attitudes to Business Investment survey has given us some interesting insight into your current priorities.
Our January 2016 survey shows that despite a slight dip in confidence at the beginning of the year, investment levels remain high – 73% of manufacturers are planning to invest this year – up from 68% in May 2015.
Within this, 50% state the investment is to secure growth, roughly in line with other sectors.
However, when it comes to export, 80% of manufacturers are planning to invest to support export activity – a jump from 68% last year, and well ahead of the general findings, where a still impressive 57% were planning this type of investment.
Given that the focal topics for this year’s EEF National Manufacturing Conference were ‘Tackling Productivity’ and ‘Winning Globally’, this result provides interesting insight into the priority for many manufacturers, and given the Government’s £1tn export target for 2020, UK manufacturers appear to be rising to the challenge.
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In productivity terms, 87% of manufacturers questioned highlighted improving efficiency to drive productivity as a key reason for investment with nearly a third (30%) stated that productivity was an essential part of their business growth.
So what does this tell us and how does it align to the findings of the Future Fit report?
Our findings indicate that the dogged determination of UK manufacturers is alive and well, and that in the areas of productivity and export you are setting the bar for the rest of the UK economy.
It’s down to us to work with you to provide the support that will ensure that we’re all future fit for the challenges and opportunities that lie ahead.